Entry Cost into Politics Soaring High: Money, Elections and Participation

The Supreme Court ordered the State Bank of India (SBI) to release the data on the controversial electoral bonds, ensuring some amount of transparency in the electoral process. The Election Commission of India (ECI) has made a step towards ensuring a level playing field for political contestation irrespective of wealth quotient. But this ‘step’ is very small in the long road ahead for ‘free and fair’ electoral participation. While corporate funding is a big issue at hand, it is necessarily limited to the Bharatiya Janata party (BJP) alone.

For instance, according to a study on electoral bonds, by the Association for Democratic Reforms, political parties received corporate donations of over Rs 920 crore at the time of the 2019 Lok Sabha elections. The BJP, Indian National Congress (INC), All India Trinamool Congress (AITC), Nationalist Congress Party (NCP), and Communist Party of India (Marxist) (CPM) were the five national parties to whom corporate contributions were examined in the study. Notably in the financial year 2020, the BJP received the most amount of corporate donations, followed by the INC and NCP. The largest donors to the BJP and INC were ITC Limited and Jankalyan Electoral Trust, in that order. Prudent Electoral Trust came in second. It should be mentioned that the majority of the BJP and INC’s overall revenue still comes from donations made through electoral bonds.

As the nation paves its way for the Lok Sabha elections of 2024, the challenge of wealth in elections becomes crucial to address. India has a highly competitive playing field and competitive elections and thriving political parties are necessary for a democracy to function properly. The integration and mobilisation of citizens, the expression and gathering of interests, are functions requiring huge capital investments.

Where does this money come from?

One can easily say that these finances are much sponsored by the political parties, but who constitutes these political parties with huge sums of money? The recently concluded state assembly elections in the Hindi heartland, mainly Rajasthan, Madhya Pradesh and Chhattisgarh, have not only reshaped the political landscape but have also thrown light on a critical aspect of electoral dynamics – the intertwining of wealth and power.

 Table 1: Analysis of winning candidates and their assets

Source: Election Commission of India data compiled by Lokniti-CSDS

The data in Table 1 provides an insightful analysis of winning candidates and their corresponding assets across three Indian states: Madhya Pradesh, Rajasthan, and Chhattisgarh.

In Madhya Pradesh, 44% of winning candidates possessed assets valued at 5 crores and above, followed by 31% with assets ranging from 2 crores to 5 crores, indicating a significant proportion of wealthy candidates securing victory.

Rajasthan also gives a similar picture with a high group of wealthy candidates. A proportion of 39% of winning candidates had assets of 5 crores and above, with 29% falling within the 2 crores to 5 crores category. Chhattisgarh, on the other hand, presents a contrasting picture, with a smaller percentage of candidates boasting high-value assets; 30% of winners possessed assets of 5 crores and above, while a considerable 66% fell within the 50 lakhs to 2 crores range. The fact that the bulk of the current Congress MLAs in Chhattisgarh lost the most recent elections despite having substantial asset values could be one explanation for this.

Naturally, the involvement of money questions the ‘free and fair’ motto of our elections, the affordability of political freedom and the due participation of people in this capital-exhaustive process.

The asset distribution among elected representatives across the three states points out the increasing role of wealth in electoral politics across party lines (Table 2). In Madhya Pradesh, the majority of BJP MLAs (75) possess assets worth 5 crores and above, while 39 BJP MLAs in Rajasthan fall into the same category. Conversely, Congress MLAs in Madhya Pradesh and Rajasthan display a lower count in the 5 crores and above bracket, with 25 and 29 MLAs respectively. Furthermore, there’s a significant representation of BJP MLAs in the 2 crores to 5 crores category across all three states, while Congress MLAs tend to have fewer members in this bracket. Interestingly, in Chhattisgarh, there is a relatively lower number of MLAs from all parties with assets worth 2 crores and above compared to Madhya Pradesh and Rajasthan.

 Table 2: Assets of elected members from different parties

Note: All figures in per cent

Source: Election Commission of India

The comparative analysis of assets reveals a substantial increase in the average assets of re-elected MLAs across the three states (Table 3). The BJP secures the highest number of re-elected MLAs across all three states, with Madhya Pradesh leading at 72, followed by Rajasthan with 36, and Chhattisgarh with 6. However, when considering the average increase in assets among re-elected MLAs, the Indian National Congress (INC) emerges with significant figures, boasting a staggering average asset increase of 51%  in Madhya Pradesh, 37% in Rajasthan, and 49% in Chhattisgarh. The BJP showcases a more modest average increase in assets, with 33% in Madhya Pradesh, 63% in Rajasthan, and 29% in Chhattisgarh.

The increase in the average assets points out to the fact that more and more people with a strong financial backing are making their way into politics. This certainly points a direction of thought that the general public cannot simply afford its entry into politics. While viewing the economic diversity among victorious candidates, the data reveals a concentration of significant wealth among a notable portion of successful political representatives, with exceptions like Chhattisgarh. With the lowest also being an unimaginable income benchmark for the Indian Public.

Additionally, it’s noteworthy that while other parties collectively had four re-elected MLAs in Rajasthan, but their average increase in assets is at a skyrocketing high of 157%. Suggesting more asset accumulation post-reelection for the smaller parties in the electoral race. Also indicating a relatively affluent landscape among winning candidates in this electoral constatation.

Table 3: Increase in the assets of re-elected MLAs

* Average is calculated from the asset increase in the sitting MLAs income from the last submitted affidavits in 2018 assembly elections.
** Average is calculated by consolidating the parties into the “other parties” category.
Note: All figures in per cent 

Source: Election Commission of India

The argument that results from election reforms is that over the course of time, it will be hard to control and monitor elections in a free and fair manner, particularly in a setting where political and public discourse are still developing. Further, maybe arguing that how difficult is it for the common Indian masses especially the youth to enter and participate on a ‘people’ representative’ level?

Is Indian politics exclusionary in its senses, debarring the ‘outsiders’ who simply cannot afford such large sums? An answer could follow up with the fact that according to a study done by the Centre for Media, the amount spent during India’s 2014 parliamentary election increased by 40% to $5 billion. And in a nation where around 3 in 5 people subsist on about $3 per day, it comes to about $8 spent by each voter.

To a certain extent, the Election Commission has indeed progressed with its reforms to guarantee the impartiality and integrity of the voting process. However, as India is allegedly the birthplace of the word “makeshift,” the likelihood of underreporting or fabricating assets increases. In light of the approaching Lok Sabha Elections, it is critical to address the issues raised by the consolidation of wealth and power in order to achieve a fully inclusive and transparent democracy. In order to maintain the nation’s democratic values in the face of changing political and economic realities, a reassessment of the current political financing environment is imperative in the pursuit of affordability in democracy and meaningful public engagement.

Nirmanyu Chouhan, a researcher at Lokniti, Centre for the Study of Developing Societies, earned his Bachelor’s degree in History from Hindu College, University of Delhi. His areas of interest include caste politics, literature, history, and Indian politics.